UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40162

M3-BRIGADE ACQUISITION II CORP.

(Exact name of registrant as specified in its charter)

Delaware		86-1359752
(State or other jurisdiction of incorporation or organization)		(1.R.S. Employer Identification No.)

1700 Broadway, 19th Floor

New York, NY 10019

(Address of principal executive offices, including zip code)

(212) 202-2200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-third of one redeemable public warrant	MBAC.U	New York Stock Exchange
Class A common stock, $0.0001 par value per share	MBAC	New York Stock Exchange
Public warrants, each whole public warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	MBAC.WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of ~~May~~August 2218, 2023, 4,536,981 shares of the ~~Class~~ Class A common stock, par value $0.0001 per share, and 10,000,000 shares of the Class B common stock, par value $0.0001 per share, were ~~issued~~ issued and outstanding.

M3-BRIGADE ACQUISITION II CORP.

FORM 10-Q FOR THE QUARTER ENDED ~~MARCH~~JUNE 3130, 2023

TABLE OF CONTENTS

			Page
Part I. Financial Information
	Item 1.	Financial Statements	1
		Condensed Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
		Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	1
		Condensed Statements of Operations for the three months ended March 31, 2023 and 2022 (Unaudited)	2
		Condensed Statements of Operations for the three and six months ended June 30, 2023 and 2022 (Unaudited)	2
		Condensed Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and 2022 (Unaudited)	3
		Condensed Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2023 and 2022 (Unaudited)	3
		Condensed Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Unaudited)	4
		Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited)	4
		Notes to Condensed Financial Statements (Unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures Regarding Market Risk	27
	Item 4.	Controls and Procedures	27
Part II. Other Information
	Item 1.	Legal Proceedings	28
	Item 1A.	Risk Factors	28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2829
	Item 3.	Defaults Upon Senior Securities	30
	Item 4.	Mine Safety Disclosures	30
	Item 5.	Other Information	30
	Item 6.	Exhibits	30
Part III. Signatures			31

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

M3-BRIGADE ACQUISITION II CORP.

CONDENSED BALANCE SHEETS

	March 31,			December 31,
	June 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	~~640~~324,~~394~~161		$	124,855
Prepaid expenses and other current assets		5,000			—
Due from affiliate		3,220			1,950
Short-term prepaid insurance		—90,505			85,820
Prepaid income taxes		—37,951			358,594
Total current assets		~~643~~460,~~614~~837			571,219
Investment and marketable securities held in trust		4647,~~868~~148,~~284~~589			404,097,322
TOTAL ASSETS	$	47,~~511~~609,~~898~~426		$	404,668,541
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accrued expenses	$	~~789~~788,~~240~~686		$	1,015,471
Accrued terminated merger transaction costs		400,000			400,000
Excise tax payable attributable to redemption of common stock		3,600,756			—
Income taxes payable		447,490			—
Due to affiliates		336,934			16,212
Due to affiliates		9,605			16,212
Total current liabilities		5,126,376			1,431,683
Total current liabilities		5,247,091			1,431,683
Warrant liability		373,333			725,333
Warrant liability		1,466,667			725,333
Deferred underwriters discount		14,000,000			14,000,000
Total liabilities		2019,~~713~~499,~~758~~709			16,157,016
Commitments
Class A Common Stock subject to possible redemption, 4,536,981 and 40,000,000 shares at redemption value as of March 31, 2023 and December 31, 2022, respectively		46,370,794			404,020,997
Class A Common Stock subject to possible redemption, 4,536,981 and 40,000,000 shares at redemption value as of June 30, 2023 and December 31, 2022, respectively		47,148,589			404,020,997
Stockholders’ Deficit
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A common shares, $0.0001 par value; 450,000,000 shares authorized; no shares issued and outstanding (excluding 4,536,981 and 40,000,000 shares subject to possible redemption, respectively) as of March 31, 2023 and December 31, 2022		—			—
Class A common shares, $0.0001 par value; 450,000,000 shares authorized; no shares issued and outstanding (excluding 4,536,981 and 40,000,000 shares subject to possible redemption, respectively) as of June 30, 2023 and December 31, 2022		—			—
Class B common shares. $0.0001 par value, 50,000,000 shares authorized; 10,000,000 issued and Outstanding as of March 31, 2023 and December 31, 2022		1,000			1,000
Class B common shares. $0.0001 par value, 50,000,000 shares authorized; 10,000,000 issued and Outstanding as of June 30, 2023 and December 31, 2022		1,000			1,000
Additional paid in capital		—			—
Accumulated deficit		(19,~~573~~039,~~654~~872	)		(15,510,472	)
Total Stockholders’ Deficit		(19,~~572~~038,~~654~~872	)		(15,509,472	)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT	$	47,~~511~~609,~~898~~426		$	404,668,541

The accompanying notes are an integral part of the unaudited condensed financial statements.

M3-BRIGADE ACQUISITION II CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Formation and operating costs	$	1232,~~159,452~~529		$	~~811~~315,~~864~~302		$	1,391,981		$	1,127,166
Terminated merger transaction costs (costs waived)		—			~~(5,400,000~~—	)		—			(5,400,000	)
(Loss) Income from operations		(1232,~~159,452~~529	)		4(315,~~588,136~~302	)		(1,391,981	)		4,272,834
Other income (expense):
Other income:
Change in fair value of warrant liabilities		~~(741~~1,093,334	)		194,~~542~~983,~~550~~778			352,000			24,526,328
Interest earned on marketable securities held in Trust Account		3557,~~888,496~~306			4078,~~283~~777			4,445,802			119,060
Total Other income, net		31,~~147~~650,~~162~~640			195,~~582~~062,~~833~~555			4,797,802			24,645,388
Income before provision for income taxes		1,~~987~~418,~~710~~111			244,~~170~~747,~~969~~253			3,405,821			28,918,222
Provision for income taxes		(~~806~~106,~~084~~534	)		—			(912,618	)		—
Net income	$	1,~~181~~311,~~626~~577		$	244,~~170~~747,~~969~~253		$	2,493,203		$	28,918,222
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		304,~~937~~536,~~228~~981			40,000,000			17,664,176			40,000,000
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	0.0309		$	0.4809		$	0.09		$	0.58
Basic and diluted weighted average shares outstanding, non-redeemable common stock		10,000,000			10,000,000			10,000,000			10,000,000
Basic and diluted net income per share, non-redeemable common stock	$	0.0309		$	0.4809		$	0.09		$	0.58

The accompanying notes are an integral part of the unaudited condensed financial statements.

M3-BRIGADE ACQUISITION II CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED ~~MARCH~~JUNE 3130, 2023

	Class A Common Stock Subject to Possible Redemption						Class B Common Shares				Additional Paid-in			Accumulated			Total Stockholder’s
	Shares			Amount			~~shares~~Shares		Amount		Capital			Deficit			Deficit
Balance – December 31, 2022		40,000,000		$	404,020,905			10,000,000	$	1,000	$	—		$	(15,510,472	)	$	(15,509,472	)
Excess fair value of founders shares over consideration		—			—			—		—		781,304			—			781,304
Contribution - Stockholder non-redemption agreements		—			—			—		—		4,454,964			—			4,454,964
Stockholder non-redemption agreements		—			—			—		—		(4,454,964	)		—			(4,454,964	)
Accretion for Class A common stock to redemption amount		—			2,425,356			—		—		(781,304	)		(1,644,052	)		(2,425,356	)
Class A Common Shares redeemed		(35,463,019	)		(360,075,559	)		—		—		—			—			—
Excise tax payable attributable to redemption of common stock		—			—			—		—		—			(3,600,756	)		(3,600,756	)
Net income		—			—			—		—		—			1,181,626			1,181,626
Balance – March 31, 2023		4,536,981		$	46,370,794			10,000,000	$	1,000	$	—		$	(19,573,654	)	$	(19,572,654	)
Accretion for Class A common stock to redemption amount		—			777,795			—		—		—			(777,795	)		(777,795	)
Net income		—			—			—		—		—			1,311,577			1,311,577
Balance – June 30, 2023		4,536,981		$	47,148,589			10,000,000	$	1,000	$	—		$	(19,039,872	)	$	(19,038,872	)

FOR THE THREE AND SIX MONTHS ENDED ~~MARCH~~JUNE 3130, 2022

	Class A Common Shares Subject to Possible Redemption				Class B Common Shares				Additional Paid-in		Accumulated			Total Stockholder’s
	Class A Common Shares Subject to Possible				Class B				Additional					Total
	Shares		Amount		shares		Amount		Capital		Deficit			Deficit
	Redemption				Common Shares				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance – December 31, 2021		40,000,000	$	400,000,000		10,000,000	$	1,000	$	—	$	(45,369,463	)	$	(45,368,463	)
Net income		—		—		—		—		—		24,170,969			24,170,969
Balance - March 31, 2022		40,000,000	$	400,000,000		10,000,000	$	1,000	$	—	$	(21,198,494	)	$	(21,197,494	)
Balance – March 31, 2022		40,000,000	$	400,000,000		10,000,000	$	1,000	$	—	$	(21,198,494	)	$	(21,197,494	)
Net income		—		—		—		—		—		4,747,253			4,747,253
Balance – June 30, 2022		40,000,000	$	400,000,000		10,000,000	$	1,000	$	—	$	(16,451,241	)	$	(16,450,241	)

The accompanying notes are an integral part of the unaudited condensed financial statements.

M3-BRIGADE ACQUISITION II CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Three Months Ended March 31,
	For the Six Months Ended June 30,
	2023			2022
Cash Flows from Operating Activities:
Net income	$	12,~~181~~493,~~626~~203		$	2428,~~170~~918,~~969~~222
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(34,~~888~~445,~~496~~802	)		(40119,~~283~~060	)
Change in fair value of warrant liabilities		~~741~~(352,~~334~~000	)		(1924,~~542~~526,~~550~~328	)
Terminated merger transaction costs waived		—			(5,400,000	)
Changes in operating assets and liabilities:
Prepaid expense and other assets		(5,000	)		(43,360	)
Due from affiliate		(1,270	)		—
Prepaid income taxes		~~358~~320,~~594~~643			—
Prepaid insurance – short term		85(4,~~820~~685	)		37161,~~990~~801
Prepaid insurance – long term		—			85,821
Accrued expenses		~~555~~554,~~073~~519			~~581~~620,~~192~~343
Accrued terminated merger transaction costs		—			(5117,~~447,~~029	)
Income taxes payable		447,490			—
Net cash used in operating activities		(1,440,392	)		(419,590	)
Net cash used in operating activities		(519,829	)		(153,890	)
Cash Flows from Investing Activities:
Cash withdrawn for taxes		1,~~041~~318,~~974~~975			—
Cash withdrawn from Trust Account in connection with redemption		360,075,560			—
Net cash provided by investing activities		361,~~117~~394,~~534~~535			—
Cash Flows from Financing Activities:
Advances from related party		2329,~~391~~720			—
Repayment of advances from related party		(8,998	)		—
Redemption of common stock		(360,075,559	)		—
Net cash used in financing activities		(~~360~~359,~~082~~754,~~166~~837	)		—
Net Change in Cash		~~515~~199,~~539~~306			(~~153~~419,~~890~~590	)
Cash – Beginning of period		124,855			987,254
Cash – End of period	$	~~640~~324,~~394~~161		$	~~833~~567,~~364~~664
Supplementary cash flow information:
Cash paid for income taxes	$	591,975		$	—
Non-Cash investing and financing activities:
Accretion for Class A common stock to redemption amount	$	23,~~425~~203,~~356~~151		$	—
Excise tax payable attributable to redemption of common stock	$	3,600,756		$	—

The accompanying notes are an integral part of the unaudited condensed financial statements.

M3-BRIGADE ACQUISITION II CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2023

(UNAUDITED)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND GOING CONCERN

M3-Brigade Acquisition II Corp. (the “Company”) is a ~~newly organized~~ blank check company incorporated as a Delaware corporation on December 16, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). On August 16, 2021, the Company entered into an Agreement and Plan of Merger with Syniverse Corporation. On February 9, 2022, the proposed transaction with Syniverse Corporation was terminated. The Company incurred $6,372,703 of costs in connection with the terminated merger transaction through December 31, 2021, of which $5,917,029 was unpaid at December 31, 2021. In February 2022, the Company was notified that accrued merger transaction costs of $5,400,000 had been waived by a vendor. The Company derecognized this liability during the quarter ended March 31, 2022.

The Company has selected December 31 as its fiscal year end.

As of ~~March~~June 3130, 2023, the Company had not commenced any operations. All activity for the period from December 16, 2020 (inception) through ~~March~~June 3130, 2023 relates to the Company’s ~~formation~~ formation and the initial public offering (“IPO”), which is described below, and its activities relating to the sourcing of an initial Business Combination. The Company believes it will not generate any operating revenue until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO and unrealized gains and losses on the change in fair value of its warrants.

The Company’s sponsor is M3-Brigade Sponsor II LP, a Delaware limited liability company (the “Sponsor”).

The registration statement for the Company’s IPO was declared effective on March 3, 2021 (the “Effective Date”). On March 8, 2021, the Company consummated the IPO of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $400,000,000, which is discussed in Note 3 and Note 8.

The underwriters had a 45-day option from the effectiveness date of the IPO (March 3, 2021) to purchase up to an additional 6,000,000 units to cover over-allotments, if any. On April 17, 2021 the underwriters’ over-allotment option expired unexercised (see Note 6).

Simultaneously with the closing of the IPO, the Company consummated the sale of 7,500,000 Private Placement Warrants (the “Private Warrants”) to the Sponsor at a price of $1.50 per Private Warrant, generating total gross proceeds of $11,250,000.

Transaction costs of the IPO amounted to $22,706,155 consisting of $8,000,000 of underwriting discount, $14,000,000 of deferred underwriting discount, and $706,155 of other offering costs. Of the offering costs, $1,265,712 is included in transaction costs on the Statement of Operations and $21,440,443 is included in equity.

Following the closing of the IPO on March 8, 2021, $400,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Warrants was placed in a Trust Account and was invested in U.S. government securities, within the meaning set forth in Section 2 (a) (16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to pay its franchise and income tax obligations and up to $100,000 of interest to pay dissolution expenses, the proceeds from the IPO and the sale of the Private Warrants will not be released from the trust account until the earlier of (i) the completion of the Company’s initial business combination and (ii) the redemption of 100% of the Company’s public shares if the Company is unable to complete the Company’s initial business combination on or prior to December 8, 2023. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with the Company’s initial business combination. Furthermore, there is no assurance that the Company will be able to successfully consummate a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by stock exchange rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable. As a result, such shares of common stock will be recorded at redemption amount and classified as temporary equity prior to the consummation of such initial Business Combination, in accordance with FASB ASC 480, “Distinguishing Liabilities from Equity.”

The Company initially had until March 8, 2023 to complete its initial Business Combination. If the Company ~~does~~did not complete a Business Combination within this period of time, it ~~shall~~was to (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $100,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation.

On March 7, 2023, the Company’s stockholders approved an extension to December 8, 2023 of the final date by which the Company was required to consummate its initial business combination. In connection with such extension and as required by the Company’s charter, each holder of Class A common stock who was not affiliated with the Company was afforded the opportunity to have the Company redeem their shares of Class A common stock at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will ~~completely~~ completely extinguish each redeeming public stockholder’s rights as a stockholder (including the right to receive further liquidating distributions, if any), subject to applicable law. The holders of 35,463,019 shares of our Class A common stock elected to have their shares redeemed. As a result, 4,536,981 shares of the Company’s Class A common stock remain outstanding on March 8, 2023 and the balance in its trust account has been reduced to $46,066,466 as of such date.

The initial stockholders have entered into letter agreements with the Company, pursuant to which they have waived their rights to participate in any redemption with respect to their initial shares; however, if the initial stockholders or any of the Company’s officers, directors or affiliates acquire shares of Class A common stock in or after the IPO, they will be entitled to a pro rata share of the Trust Account with respect to such acquired shares of Class A common stock upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within the required time period.

In the event of such redemption, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the IPO.

The Company’s Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes and working capital, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Company’s Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Company’s Sponsor has sufficient funds to satisfy its indemnity obligations and the Company’s Sponsor may not be able to satisfy those obligations. The Company has not asked the Company’s Sponsor to reserve for such eventuality. The Company believes the likelihood of the Company’s Sponsor having to indemnify the trust account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the trust account.

Risks and Uncertainties

In February 2022, the Russian Federation launched a military campaign against Ukraine. In response to these actions, the United States, the European Union and other governmental authorities have imposed a series of sanctions and penalties upon Russia and certain of its political and business leaders, and may impose additional sanctions and penalties, which restrict the ability of companies throughout the world to do business with Russia. In addition, a number of companies throughout the world who were not directly restricted by those sanctions have voluntarily elected to cease doing business with companies affiliated with Russia and it is anticipated that Russia will retaliate with its own restrictions and sanctions. It is expected that these events will have an impact upon, among other things, financial markets for the foreseeable future. If the disruptions caused by these events continue for an extended period of time, our ability to search for a business combination or finance such business combination, and the business, operations and financial performance of any target business with which we ultimately consummate a business combination, may be materially adversely affected. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote, liquidation, or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. It could also result in the diminution of the amounts available to the holders of Class A common shares upon any redemption.

On March 8, 2023, the Company’s ~~shareholders/~~ stockholders redeemed 35,463,019 (Class A) shares for a total of $360,075,559. The Company evaluated the classification and accounting of the ~~share/~~ stock redemption under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future events ~~event(s)~~ will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of ~~March~~June 3130, 2023 and concluded that it is probable that a contingent liability should be recorded. As of ~~March~~June 3130, 2023, the Company recorded an excise tax payable of $3,600,756 calculated as 1% of the value of shares redeemed.

Liquidity, Capital Resources and Going Concern

The Company’s liquidity needs prior to the IPO had been satisfied through a payment from the Sponsor of $25,000 for the Founder Shares (see Note 6). Approximately $3.2 million of the proceeds from the sale of the private placement warrants, net of direct expenses, was deposited into an operating bank account to fund the cost of operations. As of ~~March~~June 3130, 2023, the Company had $~~640~~324,~~394~~161 in its operating bank account, and had a working capital deficiency of $4,603,~~477~~490, excluding the deferred underwriting commission and warrant liability. The deferred underwriting commissions of $14 million are payable upon the closing of a business combination. The Company believes it is likely that it will be required to obtain additional funding in order to continue its operations for the next 12 months. If a business combination transaction does not occur, management believes that a substantial portion of such fees will not be required to be paid or substantially reduced.

Additionally, related parties have paid certain offering and operating costs as needed. As of ~~March~~June 3130, 2023, the Company owed $9336,~~605~~934 to the related parties on account of unreimbursed expenses incurred in connection with the sourcing of its initial Business Combination and the transactions contemplated by the Merger Agreement.

In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide Working Capital Loans to the Company (see Note 6). As of ~~March~~June 3130, 2023, there were no amounts outstanding under any Working Capital Loans.

In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements—Going Concern,” management has determined that if the Company is unable to raise additional funds to alleviate liquidity needs, obtain approval for an extension of the deadline or complete a Business Combination by December 8, 2023, then the Company will cease all operations except for the purpose of liquidating. ~~The Company intends to complete a Business Combination before the mandatory liquidation date or obtain approval for an extension, however, it is uncertain whether the Company will be able to do so.~~ If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and the mandatory liquidation, should a Business Combination not occur and an extension is not requested by the Sponsor, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 8, 2023.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchanges Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. Operating results for the three and six months ended ~~March~~June 3130, 2023 ~~are~~ are not necessarily indicative of the results that may be expected through December 31, 2023.

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company may elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of income and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these unaudited condensed financial statements is the determination of the fair value of the warrant liabilities. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had approximately $~~640~~324,~~394~~161 and $124,855 in cash as of ~~March~~June 3130, 2023 and December 31, 2022, respectively. The Company had no cash equivalents (other than assets held in the ~~Trust~~ Trust Account) at ~~March~~June 3130, 2023 and December 31, 2022.

Marketable Securities Held in Trust Account

At ~~March~~June 3130, 2023 and December 31, 2022, the ~~assets~~ assets held in the Trust Account were substantially held in U.S. government securities. Marketable Securities held in the Trust Account are classified as trading securities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation limit of $250,000. At ~~March~~June 3130, 2023 and December 31, 2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

The Company is exposed to volatility in the banking market. At various times, we could have deposits with certain U.S. banks in excess of the maximum amounts insured by the U.S. Federal Deposit Insurance Corporation (“FDIC”). On March 10, 2023, Silicon Valley Bank became insolvent. State regulators closed ~~the~~ the bank and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as its receiver. Shortly thereafter, Signature ~~Bank~~ Bank also was closed by regulators with the FDIC appointed as receiver. Similarly, First Republic Bank was seized by regulators on May 1, 2023 and sold to JP Morgan Chase. The Company did not hold any deposits with Silicon Valley Bank or Signature Bank as of ~~March~~June 3130, 2023, but it has $~~640~~324,~~394~~161 with First Republic Bank as of such date.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders’ equity.

The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets.

Net Income ~~(Loss)~~ per Common Share

Net income ~~(loss)~~ per common stock is computed by dividing net income ~~(loss)~~ by the weighted average number of shares of common stock outstanding for each of the period. The calculation of diluted income ~~(loss)~~ per common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering or (ii) Private Placement Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. At ~~March~~June 3130, 2023 and 2022, ~~Such~~such warrants are exercisable to purchase 13,333,333 and 20,833,333 shares of Class A common stock in the aggregate following a business combination, respectively.

The Company’s statements of operations include a presentation of income ~~(loss)~~ per share for Class A Common Stock subject to possible redemption in a manner similar to the two-class method of income per common stock. The calculation of diluted income (loss) per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants was contingent upon the occurrence of future events. As of ~~March~~June 3130, 2023 and 2022, the Company had ~~dilutive securities consisting of~~ 13,333,333 and 20,833,333 warrants, respectively, that could, potentially, be exercised or converted into common stock~~, however because of the net income (loss) they are considered anti-dilutive instruments~~. As a result, diluted loss per share is the same as basic income ~~(loss)~~ per share for the periods presented.

The underwriters had a 45-day option from the effectiveness date of the IPO (March 3, 2021) to purchase up to an additional 6,000,000 units to cover over-allotments, if any. That option expired without being exercised on April 17, 2021.

Below is a reconciliation of the net income ~~(loss)~~ per common stock:

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2023				2022				2023				2022
	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B
Basic and diluted net income per common stock
Numerator:
Allocation of net income, as adjusted	$	~~892~~409,~~983~~342	$	~~288~~902,~~643~~235	$	193,~~336~~797,~~775~~802	$	4949,~~834,194~~451	$	1,591,964	$	901,239	$	23,134,578	$	5,783,644
Denominator:
Basic and diluted weighted average shares outstanding		304,~~937~~536,~~228~~981		10,000,000		40,000,000		10,000,000		17,664,176		10,000,000		40,000,000		10,000,000
Basic and diluted net income per common stock	$	0.0309	$	0.0309	$	0.4809	$	0.4809	$	0.09	$	0.09	$	0.58	$	0.58

Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering. Offering costs are charged to stockholders’ equity or the Statements of Operations based on the residual method of the Public and Private Warrants to the proceeds received from the Units sold upon the completion of the IPO. Accordingly offering costs totaling $22,706,155 (consisting of $8,000,000 of underwriting discount, $14,000,000 of deferred underwriting discount, and $706,155 of other offering costs) were recognized with $1,265,712 allocated to the Public Warrants, Overallotment Option and Private Warrants, included in the Statement of Operations as a component of Other income (expenses) and $21,440,443 included in temporary equity.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. The fair value of the warrant liabilities are discussed below.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are recorded at fair value on the grant date and re- valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the warrants are a derivative instrument. FASB ASC 470-20, “Debt with Conversion and Other Options” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate IPO proceeds from the Units between Class A common stock and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then to the Class A common stock.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the ~~expected~~ expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the ~~expected~~ expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of ~~March~~June 3130, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rate was 40 7.5551% and 0% for the three months ended ~~March~~June 3130, 2023 and 2022, respectively, 26.80% and 0% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended ~~March~~June 3130, 2023 and 2022, due to changes in fair value in warrant liability and the valuation allowance on the deferred tax assets.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of ~~March~~June 3130, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2022. The adoption of ASU 2020- 06 did not have an impact on the Company’s unaudited condensed financial statements.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

NOTE 3. INITIAL PUBLIC OFFERING

On March 8, 2021, the Company consummated the IPO of 40,000,000 units (the “Units”), at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock, and one-third warrant to purchase one share of Class A common stock. Each warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. Each warrant will become exercisable on the later of 30 days after the completion of the initial business combination or 12 months from the closing of the IPO and will expire five years after the completion of the initial business combination, or earlier upon redemption or liquidation. (See Note 7).

The underwriters were granted a 45-day option from the effective date of the IPO (March 3, 2021) to purchase up to an additional 6,000,000 units to cover over-allotments. The option expired unexercised.

Warrants

Each whole warrant entitles the registered holder to purchase one whole share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the IPO or 30 days after the completion of the Company’s initial business combination.

Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of the Company’s initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying the Company’s obligations described below with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

The Company has agreed that as soon as practicable, but in no event later than thirty (30) days, after the closing of the Company’s initial business combination, the Company will use commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants. The Company will use commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective within 90 days after the closing of the Company’s initial business combination, warrant holders may, under the circumstances specified in the warrant agreement and until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis.

Once the warrants become exercisable, the Company may call the warrants for redemption:

●

in whole and not in part;

●

at a price of $0.01 per warrant;

●

upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and

●

if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends to the notice of redemption to the warrant holders.

If and when the warrants become redeemable by the Company, the Company may exercise the Company’s redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price as well as the $11.50 warrant exercise price (for whole shares) after the redemption notice is issued without affecting the right of the Company to consummate such redemption.

If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the Company’s management will consider, among other factors, the Company’s cash position, the number of warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of the Company’s warrants. If the Company’s management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If the Company’s management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to the Company if the Company does not need the cash from the exercise of the warrants after the Company’s initial business combination. If the Company calls the Company’s warrants for redemption and the Company’s management does not take advantage of this option, the Company’s sponsor and its permitted transferees would still be entitled to exercise their private placement warrants contained in the private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.

A holder of a warrant may notify the Company in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of Class A common stock outstanding immediately after giving effect to such exercise.

If the number of outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A common stock, or by a split- up of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock. A rights offering to holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product of (i) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Class A common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if the Company, at any time while the warrants are outstanding and unexpired, pays a dividend or makes a distribution in cash, securities or other assets to the holders of Class A common stock on account of such shares of Class A common stock (or other shares of the Company’s capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends of which are dividends up to $0.50 per share per year, (c) to satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination, (d) as a result of the repurchase of shares of Class A common stock by the company if the proposed initial business combination is presented to the stockholders of the Company for approval, or (e) in connection with the redemption of the Company’s public shares upon the Company’s failure to complete the Company’s initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event. No other adjustments will be required to be made including for issuing Class A common stock at below market price and/or exercise price. If the number of outstanding shares of the Company’s Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.

Whenever the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately thereafter.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Company’s initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s sponsor or its affiliates, without taking into account any founder shares held by the Company’s sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial business combination on the date of the consummation of the Company’s initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the Company’s initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

In case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described above or any that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is are the continuing corporation and that does not result in any reclassification or reorganization of the Company’s outstanding shares of Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of the Company’s Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a result of the repurchase of shares of Class A common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of Class A common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Class A common stock in such a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.

The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or to correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. A change affecting the terms of the private placement warrants will require the approval of holders of at least 50% of the private placement warrants.

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Warrants may be exercised only for a whole number of shares of Class A common stock. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of Class A common stock to be issued to the warrant holder. As a result, warrant holders not purchasing an even number of warrants must sell any odd number of warrants in order to obtain full value from the fractional interest that will not be issued.

The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of the Company’s initial business combination (except, among other limited exceptions as described under “Principal Stockholders— Transfers of Founder Shares and Private Placement Warrants,” to the Company’s officers and directors and other persons or entities affiliated with the sponsor) and they will not be redeemable by the Company so long as they are held by the sponsor or its permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the IPO. If the private placement warrants are held by holders other than the sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the IPO.

If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that the Company has agreed that these warrants will be exercisable on a cashless basis so long as they are held by the Company’s sponsor and permitted transferees is because it is not known at this time whether they will be affiliated with the Company following a business combination. If they remain affiliated with the Company, their ability to sell the Company’s securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling the Company’s securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell the Company’s securities, an insider cannot trade in the Company’s securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, The Company believes that allowing the holders to exercise such warrants on a cashless basis is appropriate.

In order to finance transaction costs in connection with an intended initial business combination, the Company’s sponsor or an affiliate of the Company’s sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes the Company’s initial business combination, the Company would repay such loaned amounts out of the proceeds of the trust account released to the Company. In the event that the Company’s initial business combination does not close, the Company may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the Company’s trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.

NOTE 4. PRIVATE PLACEMENT

Simultaneously with the closing of the IPO, the Sponsor and the Representatives purchased an aggregate of 7,500,000 Private Warrants at a purchase price of $1.50 per Private Unit, generating gross proceeds to the Company of $11,250,000. Except to the extent described in Note 3 above, the Private Warrants (and the underlying securities) are identical to the Warrants sold as part of the Units in the IPO. At the issuance date of March 8, 2021, the fair value of the Private Warrants was determined to be $11,779,653; $529,653 in excess of the $11,250,000 received by the Company. This excess ~~fair~~ fair value of $529,653 is recognized as an expense in the statement of operations for the period ended March 31, 2021. As described in Note 5, the private placement warrants were permanently surrendered by the Sponsor, and the Sponsor relinquished all rights in such warrants, with no consideration being provided to the Sponsor in exchange thereof on December 31, 2022.

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On December 31, 2020, the Sponsor purchased 7,187,500 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.003 per share. On February 11, 2021, the Company effected a stock split, by means of issuing an additional 1,437,500 founder shares, paid out of the Company’s share premium account and accordingly credited as fully paid, to the Company’s sponsor, resulting in 8,625,000 founder shares issued and outstanding. On February 19, 2021, the Company effected a further stock split, by means of issuing an additional 2,875,000 founder shares, paid out of the Company’s share premium account and accordingly credited as fully paid, to the Company’s sponsor, resulting in 11,500,000 founder shares issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock splits (see Note 8). The Founder Shares are identical to the Class A common stock included in the Units sold in the IPO except that the Founder Shares are subject to certain transfer restrictions, as described in more detail below. Each Founder Share is automatically convertible to a share of Class A common stock on a one-for-one basis at the time of the Company’s initial business combination. The Sponsor had agreed to forfeit up to 1,500,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. Because the underwriter did not exercise its option, the forfeiture was enacted in 2021.

The Company’s initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier of (A) one year after the completion of the Company’s initial Business Combination, or earlier if, subsequent to the Company’s initial Business Combination, the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property (the “Lock Up Period”).

Due to Related Party

The amount due to related parties prior to the closing of the IPO of $128,628 for the payment of certain offering costs and taxes was repaid on March 16, 2021.

From time to time, related parties of the Company incur expenses such as travel and other expenses in connection with the sourcing of its initial business combination. During the year ended December 2022, a total of $3,722 of expenses were paid on behalf of the Company by a related party. During the three ~~months~~and ~~ended~~six months ~~March~~ended 31June 30, 2023, the Company reimbursed approximately $8,998 that was incurred by related parties and a total of $2,391 of expenses ~~were~~ were paid on behalf of the Company by a related party. As of ~~March~~June 3130, 2023 and December 31, 2022, the Company owed approximately $9336,~~605 and~~934 and $16,212 to related parties on account of ~~reimbursed~~reimbursable expenses incurred in connection with the sourcing of its initial business combination.

Due from Related Party

During the period ended ~~March~~June 3130, 2023 and December 31, 2022, the Company remitted $13,~~270~~220 and $1,950 of payments for expenses on behalf of a related party, respectively. As of ~~March~~June 3130, ~~2023~~ 2023 and December 31, 2022, the Company was owed $3,220 and $1,950, respectively by a related party for expenses incurred by the related ~~party~~ party and paid by the Company.

Consulting Services and Share Purchase Agreement

On February 13, 2023, the Sponsor entered into a Consulting Services and Shares Purchase Agreement with a Consultant, pursuant to which the Consultant has committed to provide consulting, advisory and related services to the Sponsor and to the Company. In return for such services, the Consultant entered into an agreement to acquire 200,000 Class B Founders Shares from the Sponsor for a purchase price of $695.60, with such acquisition to occur at the time of consummation of the Business Combination. In addition, the Sponsor agreed to compensate the consultant with a payment of $125,000 if if the deadline for the Company to consummate a Business Combination is extended from March 8, 2023 to December 8, 2023 or a date thereafter. On March 7, 2023, the deadline to consummate a Business Combination was extended to December 8, 2023. The Company estimated the aggregate fair value of the 200,000 founders shares to be issued to be $782,000 or $3.91 per share. The excess of the fair value of the founder shares over the purchase price consideration agreed with the Consultant was determined to be an expense to the Company. For the three and six months ended ~~March~~June 3130, 2023., $125,000 was accrued for consultancy services under this agreement.

Non-redemption Agreements

On February 24, 2023 and March 2, 2023, the Company and the Sponsor entered into non-redemption agreements (the “Non-Redemption Agreements”) with a total of various funds managed by investment management firms who are unaffiliated with the Company. Pursuant to the Non-Redemption Agreements, such funds agreed not to redeem an aggregate of 4,452,653 shares of the Company’s Class A common stock in connection with the special meeting of the stockholders called by the Company (the “Special Meeting”) to consider and approve an extension of time for the Company to consummate an initial business combination (the “Extension Proposal”) from March 8, 2023 to December 8, 2023 (the “Extension”). In exchange for the foregoing commitments not to redeem such shares of Class A common stock, the Sponsor agreed to transfer to such funds an aggregate of 1,113,161 shares of the Company’s Class B common stock if they continued to hold such Non-Redeemed Shares through the Special Meeting. Pursuant to the Underwriting Agreement, dated as of March 3, 2021, by and between the Company and Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), which was filed as Exhibit 1.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 9, 2021, Cantor Fitzgerald consented in writing to the transfers of the Company’s Class B common stock contemplated by the Non-Redemption Agreements. On March 13, 2023, a total of 1,113,161 shares of class B common stock were transferred pursuant to the terms of the Non-Redemption Agreements. The Company estimated the aggregate fair value of the 1,113,161 founders shares attributable to the Non-Redeeming Stockholders to be $4,454,964 or $4.00 per share. The excess of the fair value of the founder shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A.

Accordingly, in substance, it was recognized by the Company as a capital contribution by the Sponsor to induce these holders of the Class A shares not to redeem, with a corresponding charge to additional paid-in capital to recognize the fair value of the shares transferred as an offering cost.

Reimbursement to Management and Employees

During the period ended ~~March~~June 3130, 2023 and December 31, 2022, the Company did not reimburse any employee on an individual basis for expenses incurred. All reimbursement of expenses made on behalf of the SPAC are made to the affiliated Companies of the seconded employees that incurred the expenses. These expenses are disclosed above.

Working Capital Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.50 per warrant agreement per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. At ~~March~~June 3130, 2023 ~~and~~ and December 31, 2022, no Working Capital Loans were outstanding.

Abandonment of Interest in Private Placement Warrants

On December 30, 2022, the Company received notice from the Sponsor that the Sponsor has determined to irrevocably and unconditionally abandon its interest in the 7,500,000 private placement warrants held by it (the “Private Warrants”) and permanently surrender and relinquish all rights in such warrants, with no consideration being provided to the Sponsor in exchange therefor. In light of this determination by the Sponsor, the Private Warrants were cancelled and retired. During the period ended December 31, 2022, a total of $450,708 was recorded in the statement of stockholders deficit as a result of the retirement of the Private warrants.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Registration Rights

The holders of the founder shares and any warrants that may be issued upon conversion of working capital loans (and any Class A common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and stockholder rights agreement to be signed prior to or on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the Company’s initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

On March 8, 2021, the underwriters were paid a cash underwriting discount of 2% of the gross proceeds of the IPO, or $8,000,000. The underwriters are entitled to a deferred fee of $0.35 per Unit, or $14,000,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. The underwriters had a 45-day option from the date of the IPO to purchase up to an additional 6,000,000 units to cover over-allotments, which expired unexercised.

Transaction-Related Fees

In connection with the now-terminated merger agreement with Syniverse Corporation, the Company entered into agreements with certain professional service advisors in which approximately $11 million of fees in the aggregate would have been payable upon consummation of such merger agreement. These fees include a contractual and contingent component. As a result of the termination of the merger agreement on February 9, 2022, such fees will not be payable and the contractual component was derecognized during the quarter ended March 31, 2022.

Asserted and Unasserted Claims

On October 15, 2021, Adam Snitkoff, a purported stockholder of the Company, filed a complaint in the Supreme Court of the State of New York (the “Snitkoff Litigation”), naming the Company, Syniverse and the directors of the Company as defendants. The complaint alleged claims for fraudulent and negligent misrepresentation and concealment in connection with allegedly false and misleading statements and omissions in the Company’s proxy statement concerning the proposed Business Combination. The complaint sought, among other things, injunctive relief and compensatory damages.

In addition, the Company received letters from certain purported shareholders or representatives thereof (the “Demand Letters”) demanding that changes be made to the disclosures contained in the Company’s proxy statement, which demands were, in the aggregate, substantially similar to the claims made in the Snitkoff Litigation. No litigation was commenced or threatened with respect to those letters.

The Snitkoff Litigation was terminated pursuant to Notice of Voluntary Discontinuance with Prejudice on February 4, 2022 and the termination of the merger agreement with Syniverse rendered the claims in the Snitkoff Litigation and the Demand Letters moot. In the opinion of the Company, the claims asserted in the Snikoff Litigation and the Demand Letters will not have a material adverse effect on our financial position, results of operations or the cash flow.

In March 2023, a vendor of the Company filed a lawsuit against a related party of the Company to recover unpaid invoices in the amount of approximately $112,500 that are purportedly owing by that related party. Because the amounts claimed relate to services purportedly provided to the Company, and not to such related party, they are reflected in the Company’s accounts payable and accrued expenses. The Company is in discussions with the vendor to reach a settlement on this matter.

Termination of Proposed Transaction

On February 9, 2022, the proposed transaction with Syniverse Corporation was terminated. The Company was able to negotiate a reduction of substantial portion of professional fees incurred in connection with the proposed transaction which are recorded in the accounts of the Company at December 31, 2022.

NOTE 7. CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION

At ~~March~~June 3130, 2023 and December 31, 2022, Class A common stock subject to possible redemption is classified as a liability instrument and is measured at fair value. A summary of the activity in the account is summarized as follows:

Proceeds at issuance date (March 8, 2021)	$	400,000,000
Less:
Proceeds allocated to public warrants		(20,553,964	)
Class A common stock issuance cost		(21,440,443	)
Fair value overallotment option		(1,406,950	)
Add:
Remeasurement of the carrying value to redemption value		47,422,354
Class A common shares subject to redemption, December 31, 2022	$	404,020,997
Less:
Redemption		(360,075,559	)
Add:
Remeasurement of the carrying value to redemption value		23,~~425~~203,~~356~~151
Class A common shares subject to redemption, March 31, 2023	$	46,370,794
Class A common shares subject to redemption, June 30, 2023	$	47,148,589

NOTE 8. STOCKHOLDERS’ DEFICIT

Preferred Stock — The Company is authorized to issue a total of 1,000,000 shares of preferred stock at par value of $0.0001 each. At ~~March~~June 3130, 2023 and December 31, 2022, there were no preferred shares issued or outstanding.

Class A common stock — The Company is authorized to issue a total of 450,000,000 shares of Class A common stock at par value of $0.0001 each. As of ~~March~~June 3130, 2023 and December 31, 2022, 4,536,981 and 40,000,000 shares of Class A common stock subject to possible redemption issued and outstanding, respectively.

Class B common stock — The Company is authorized to issue a total of 50,000,000 shares of Class B common stock at par value of $0.0001 each. On December 31, 2020, the Sponsor purchased 7,187,500 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.003 per share. On February 11, 2021, the Company effected a stock split, by means of issuing an additional 1,437,500 founder shares, paid out of the Company’s share premium account and accordingly credited as fully paid, to the Company’s sponsor, resulting in 8,625,000 founder shares issued and outstanding. On February 19, 2021, the Company effected a further stock split, by means of issuing an additional 2,875,000 founder shares, paid out of the Company’s share premium account and accordingly credited as fully paid, to the Company’s sponsor, resulting in 11,500,000 founder shares issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock splits (see Note 5). This number includes 1,500,000 shares of Class B common stock which were forfeited because the over-allotment option was not exercised by the underwriters (See Note 5). At ~~March~~June 3130, 2023 and December 31, 2022, there were 10,000,000 shares issued and outstanding.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the IPO and related to the closing of the business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of the IPO plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination.

With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.

NOTE 9. RECURRING FAIR VALUE MEASUREMENTS

Investment Held in Trust Account

As of ~~March~~June 3130, 2023 and December 31, 2022, investment securities in the Company’s Trust Account consisted of U.S. government securities in the amount of $4647,~~868~~148,~~284~~589 and $404,097,322, respectively. Since all of the Company’s permitted investments consist of treasury securities, fair values of its investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

Warrant Liability

At ~~March~~June 3130, 2023 and December 31, 2022, there were 13,333,333 public warrants for the purchase of Class A shares at $11.50 per share, respectively. At ~~March~~June 3130, 2023 and December 31, 2022, the Company’s warrant liabilities were valued at $1373,~~466,667~~333 and $725,333, respectively. Under the guidance in ASC 815-40 ~~the~~ the warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the balance sheet at fair value. ~~This~~ This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to to fair value, with the change in fair value recognized in the Company’s statements of operations.

Overallotment Option

Upon completion the IPO, the underwriters held an overallotment option which expired 45 days later. The overallotment option represents a financials instrument which was recognized at fair value as a liability instrument at inception. The principal assumptions going into the fair value computation were as follows: Term – 45 days; Unit price $10.00, risk free rate 0.04%, volatility 16.7%. Upon expiration, the change in fair value to zero was recognized in the Company’s statement of operations.

Recurring Fair Value Measurements

The Company’s investments consist of U.S. government securities or mutual funds that invest primarily in U.S. government securities. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. The Company’s warrant liability (including Public Warrants prior to trading separately on April 26, 2021) is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the private warrant liability is classified within Level 3 of the fair value hierarchy. The Public Warrants were transferred to Level 1 for the period ending December 31, 2021.

The following table presents fair value information as of ~~March~~June 3130, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

~~March~~June 3130, 2023

Carrying Value

(Level 1)

(Level 2)

(Level 3)

Assets:

Investments held in Trust Account - U.S. Treasury Securities

U.S. Treasury Securities

4647,~~868~~148,~~284~~589

—

Liabilities:

Private Placement Warrants

—

Public Warrants

1373,~~466,667~~333

—

December 31, 2022

	Carrying Value		(Level 1)		(Level 2)		(Level 3)
Assets:
Investments held in Trust Account - U.S. Treasury Securities
U.S. Treasury Securities	$	404,097,322	$	404,097,322		—		—
Liabilities:
Private Placement Warrants		—		—		—		—
Public Warrants		725,333		725,333		—		—

Measurement

The Company established the initial fair value for the Warrants as of March 8, 2021, which was the date of the consummation of the Company’s IPO, and on December 31, 2022. For the initial periods, neither the Public Warrants nor the Private Warrants were separately traded on an open market, but the Public Warrants did commence separate trading as of April 26, 2021. As such, the Company used a Monte Carlo simulation model to value the Warrants for the initial periods and valued the Public Warrants based upon market values for the December 31, 2021 remeasurement. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-third of one Public Warrant), (ii) the sale of Private Warrants, and (iii) the issuance of Class B common stock, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption (temporary equity), Class A common stock (permanent equity) and Class B common stock (permanent equity) based on their relative fair ~~values~~ values at the initial measurement date. The Warrants were classified within Level 3 of the fair value hierarchy at the initial measurement ~~dates~~ dates due to the use of unobservable inputs. The aggregate fair value of the Public Warrants, which amounted to $20,553,963 at the closing ~~date~~ date of the IPO, was transferred to Level 1 following the detachment of the warrants for separate trading and at which time quoted prices ~~existed~~ existed in active markets. There were no Private Warrants outstanding at ~~March~~June 3130, 2023. The key inputs into the Monte Carlo simulation model for the Warrants were as follows at December 31, 2022 for the private warrants:

	December 31, 2022
Risk-free interest rate		4.63	%
Expected term (years)		1.30
Expected volatility		6.3	%
Exercise price	$	11.50
Probability of completing a business combination		15	%
Dividend yield		0

NOTE 10. SUBSEQUENT EVENTS

The Company evaluated events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any events that would have required adjustment to or disclosure in the unaudited condensed financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to M3-Brigade Acquisition II Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We are a blank check company formed under the laws of the State of Delaware on December 16, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

Recent Developments

Our amended and restated certificate of incorporation initially provided that we had until March 8, 2023 to consummate our initial business combination. On March 7, 2023, we obtained an extension of that expiry date to December 8, 2023. In connection with such extension and as required by the Company’s charter, each holder of Class A common stock who was not affiliated with the Company was afforded the opportunity to cause the Company to redeem such holder’s shares of Class A common stock at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law. The holders of 35,463,019 shares of our Class A common stock elected to have their shares redeemed. As a result, 4,536,981 shares of our Class A common stock remain outstanding on March 8, 2023 and the balance in our trust account has been reduced to $46,066,466 as of such date.

Results of Operations

We have not generated any revenues to date. Our only activities from December 16, 2020 (inception) through ~~March~~June 3130, 2023 were organizational activities, those necessary to prepare ~~for~~ for the Initial Public Offering, described below, and the search for a target company for a Business Combination (including our proposed ~~business~~ business combination with Syniverse Corporation which was terminated by mutual agreement of the parties on February 9, 2022). We do not ~~expect~~ expect to generate any revenues until after the completion of our Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses and expenses relating to the sourcing and consummation our initial business combination.

For the three months ended ~~March~~June 3130, 2023, we ~~had~~ had a net income of $1,~~181~~311,~~626~~577, which consists of interest earned on investments of $3557,~~888,496,~~306 ~~offset~~and bychange ~~formation~~in ~~and~~fair ~~operating~~value ~~costs~~of warrant liabilities of $1,~~159~~093,~~452~~334, ~~change~~offset inby ~~fair~~formation ~~value~~and ofoperating ~~warrant~~costs ~~liabilities~~ of $~~741~~232,~~334~~529 and provision for income taxes of $~~806~~106,~~084~~534.

For the ~~period~~six months ended ~~March~~June 3130, ~~2022~~2023, we had a a net income of $242,~~170~~493,~~969~~203, which consists of ~~operating~~interest ~~costs~~earned on investments of $~~811~~4,~~864~~445,802 ~~costs~~and change in fair value of ~~the~~warrant ~~terminated~~liabilities of ~~business~~$352,000, ~~combination~~offset by formation and operating costs of $51,~~400~~391,~~000~~ 981 and ~~other~~provision for income taxes of $19912,~~582,833~~618.

~~Through~~For ~~March 31, 2023, our efforts have been limited to organizational activities, activities relating to identifying and evaluating prospective acquisition candidates (including activities relating to~~ the ~~terminated~~three ~~merger~~months ~~agreement~~ended ~~with~~June ~~Syniverse Corporation) and activities relating to general corporate matters. We have not generated any revenues from operations~~30, ~~other than interest income on the proceeds held in the Trust Account. As of March 31, 2023 and December 31,~~ 2022, ~~$46,868,284~~we ~~and $404,097,322 was held in the Trust Account, respectively. We~~ had a ~~cash~~net ~~outside~~income of ~~trust of~~ $~~640~~4,~~394 and $124~~747,~~855 at March 31~~253, ~~2023~~which ~~and~~consists ~~December~~of ~~31,~~change ~~2022,~~in ~~respectively~~fair ~~and~~value weof ~~had~~warrant ~~$5,247,091~~liabilities ~~and~~of $14,~~431~~983,~~683~~778 ~~of accounts payable~~ and ~~accrued~~unrealized ~~expenses~~gain ason investments of ~~March 31~~$78, ~~2023 and December 31~~777, ~~2022.~~offset ~~Approximately~~by ~~$400,000~~formation ~~of such liabilities at March 31, 2023~~ and ~~December 31,~~operating ~~2022~~costs ~~relate to the terminated business combination,~~ of ~~which~~ $5315,~~400,000 of the December 31, 2021 balance was waived by the vendor in February 2022~~302.

~~Except~~For ~~for~~ the ~~withdrawal~~six ofmonths ~~interest~~ended toJune ~~pay our taxes and up to $100~~30,~~000~~ ~~to pay dissolution expenses~~2022, ifwe ~~any, our amended and restated certificate of incorporation (the “Charter”)~~had ~~provides~~a ~~that~~net ~~none~~income of ~~the~~$28,918,222, ~~funds~~which ~~held~~consists ~~in trust will be released from the Trust Account until the earliest~~ of ~~(i)~~which ~~the~~consists ~~completion~~ of ~~an initial~~change ~~business combination; (ii) the redemption of any of the shares of Class A common stock included~~ in ~~the~~fair ~~units~~value ~~sold in the Public Offering (the “Units”) properly submitted in connection with a stockholder vote to amend the Charter to modify the substance or timing~~ of ~~the~~warrant ~~Company’s~~liabilities ~~obligation to redeem 100%~~ of ~~the common stock included in the Units being sold in the Public Offering if the Company does not complete an initial business combination within~~ $24,526,328, ~~months from the closing of the Public Offering or with respect~~unrealized togain ~~any~~on ~~other~~investments ~~material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) the redemption~~ of ~~100% of the shares of Class A common stock included in the Units sold in the Public Offering if we are unable to complete a business combination within such 24-month period. On March 7~~$119,060 ~~2023,~~and ~~the~~costs ~~Company’s stockholders approved an extension to December 8, 2023~~ of the ~~final~~terminated ~~date by which the Company was required to consummate its initial~~ business combination. ~~In connection with such extension and as required by the Company’s charter, each holder~~ of Class A common stock who was not affiliated with the Company was afforded the opportunity to have the Company redeem their shares of Class A common stock at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $~~100~~5,400,000 ~~of interest to pay dissolution expenses)~~, ~~divided~~offset by ~~the~~formation ~~number~~and ofoperating ~~then outstanding public shares, which redemption completely extinguished each redeeming public stockholder’s~~costs ~~rights as a stockholder (including the right to receive further liquidating distributions, if any), subject to applicable law. As a result, $360,075,559~~ of trust proceeds was withdrawn to pay the redemption price for the 35,463,019 shares of Class A common stock that was redeemed by the Company’s stockholders. During the three months ended March 31, 2023, we also have withdrawn $1,~~041~~127,~~975 from interest earned on the trust proceeds~~166. ~~Other than the deferred underwriting discounts and commissions, no amounts are payable to the underwriters of the Public Offering in the event of a business combination.~~

Through June 30, 2023, our efforts have been limited to organizational activities, activities relating to identifying and evaluating prospective acquisition candidates (including activities relating to the terminated merger agreement with Syniverse Corporation) and activities relating to general corporate matters. We have not generated any revenues from operations, other than interest income on the proceeds held in the Trust Account. As of June 30, 2023 and December 31, 2022, $47,148,589 and $404,097,322 was held in the Trust Account, respectively. We had cash outside of trust of $324,161 and $124,855 at June 30, 2023 and December 31, 2022, respectively and we had $5,126,376 and $1,431,683 of accounts payable and accrued expenses as of June 30, 2023 and December 31, 2022. Approximately $400,000 of such liabilities at June 30, 2023 and December 31, 2022 relate to the terminated business combination, of which $5,400,000 of the December 31, 2021 balance was waived by the vendor in February 2022.

Except for the withdrawal of interest to pay our taxes and up to $100,000 to pay dissolution expenses, if any, our amended and restated certificate of incorporation (the “Charter”) provides that none of the funds held in trust will be released from the Trust Account until the earliest of (i) the completion of an initial business combination; (ii) the redemption of any of the shares of Class A common stock included in the units sold in the Public Offering (the “Units”) properly submitted in connection with a stockholder vote to amend the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the common stock included in the Units being sold in the Public Offering if the Company does not complete an initial business combination within 24 months from the closing of the Public Offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) the redemption of 100% of the shares of Class A common stock included in the Units sold in the Public Offering if we are unable to complete a business combination within such 24-month period. On March 7, 2023, the Company’s stockholders approved an extension to December 8, 2023 of the final date by which the Company was required to consummate its initial business combination. In connection with such extension and as required by the Company’s charter, each holder of Class A common stock who was not affiliated with the Company was afforded the opportunity to have the Company redeem their shares of Class A common stock at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption completely extinguished each redeeming public stockholder’s rights as a stockholder (including the right to receive further liquidating distributions, if any), subject to applicable law. As a result, $360,075,559 of trust proceeds was withdrawn to pay the redemption price for the 35,463,019 shares of Class A common stock that was redeemed by the Company’s stockholders. During the three and six months ended June 30, 2023, we also have withdrawn $1,318,975 from interest earned on the trust proceeds. Other than the deferred underwriting discounts and commissions, no amounts are payable to the underwriters of the Public Offering in the event of a business combination.

Liquidity and Capital Resources

On March 8, 2021, we consummated the Initial Public Offering of 40,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $400,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,500,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $11,250,000. On April 19, 2021, the overallotment option provided to our underwriter expired without being exercised.

Following the Initial Public Offering, a total of $400,000,000 was placed in the Trust Account and we had $1,530,000 of cash held outside of the Trust Account, after payment of costs related to the Initial Public Offering, and available for working capital purposes. We incurred $22,706,154 in transaction costs, including $8,000,000 of underwriting fees, $14,000,000 of deferred underwriting fees and $706,154 of other offering costs.

For the ~~three~~six months ended ~~March~~June 3130, 2023, cash ~~used~~ used in operating activities was $~~519~~1,~~829~~440,392. Net income of $12,~~181~~493,~~626~~203 was primarily comprised of change in fair value of warrant liability of $~~741~~352,~~334~~000 and interest earned on marketable securities held in Trust Account of $34,~~888~~445,~~496~~802. Changes in operating assets and liabilities provided $1864,~~445,707~~207 of cash for operating activities.

For the ~~three~~six months ended ~~March~~June 3130, 2022, cash ~~used~~ used in operating activities was $~~153~~419,~~890~~590. Net income of $2428,~~170~~918,~~969~~222 was primarily comprised of change in fair value of warrant liability of of $1924,~~542~~526,~~550~~328 and ~~interest~~unrealized ~~earned~~gain on marketable securities held in Trust Account of $40119,~~283~~060. Changes in operating assets and liabilities used $4,~~742~~692,~~026~~424 of cash for operating activities.

In February of 2022, a vendor waived payment of $5,400,000 of the accrued transaction costs. This reversal is included in the statement of operations.

AsOn of March 317, 2023, wethe ~~had~~Company’s ~~cash and marketable~~stockholders ~~securities~~approved ~~held~~an inextension ~~the~~to ~~Trust~~December ~~Account of approximately $46~~8,~~868,284.~~ We2023 ~~intend to use substantially all~~ of the ~~funds~~final ~~held~~date inby ~~the~~which ~~Trust Account, including any amounts representing interest earned on~~ the ~~Trust~~Company ~~Account~~was required to ~~complete~~consummate ~~our~~its ~~Business~~initial ~~Combination.~~business ~~We may withdraw~~combination. ~~interest~~In toconnection ~~pay~~with ~~franchise~~such extension and ~~income~~as ~~taxes.~~required ~~During~~by the ~~period~~Company’s ~~ended March 31~~charter, ~~2023,~~ we ~~withdraw~~redeemed ~~$361,117,534~~the ~~interest~~Class ~~earned~~A oncommon ~~the~~stock ~~Trust Account~~of toeach ~~pay~~holder thereof ~~tax~~who ~~obligations~~was ~~and~~not toaffiliated ~~pay~~with the ~~redemption.~~Company Toand ~~the~~elected ~~extent~~to ~~that~~have ~~our~~its ~~capital~~holdings ~~stock~~so orredeemed. ~~debt~~As isa ~~used~~result, in4,536,981 ~~whole~~shares orof inthe ~~part,~~Company’s asClass ~~consideration~~A tocommon ~~complete~~stock ~~our~~remain ~~Business~~outstanding ~~Combination,~~on ~~the~~March ~~remaining~~8, ~~proceeds~~2023 ~~held~~and in the ~~Trust~~balance ~~Account~~in ~~will~~its betrust ~~used~~account aswas ~~working~~reduced ~~capital~~ to ~~finance~~$46,066,466 ~~the~~as ~~operations~~ of ~~the~~such ~~target business or businesses, make other acquisitions and pursue our growth strategies~~date.

As of ~~March~~June 3130, 2023, we had cash ofand ~~$640,394~~marketable ~~outside~~securities ofheld in the Trust Account of ~~which~~approximately $~~631~~47,~~800~~148,589. ~~represents~~We ~~amount~~intend ~~withdrawn~~to ~~from~~use ~~Trust~~substantially ~~for~~all ~~tax~~of ~~purposes.~~the ~~The~~funds ~~Company~~held ~~believes~~in itthe isTrust ~~likely~~Account, ~~that~~including itany ~~will~~amounts berepresenting ~~required~~interest earned on the Trust Account to ~~obtain~~complete ~~additional~~our ~~funding~~Business inCombination. ~~order~~We may withdraw interest to ~~continue~~pay ~~its~~franchise ~~operations~~and ~~for~~income taxes. During the ~~next~~period 12ended ~~months.~~June If30, a2023, ~~business~~we ~~combination~~withdraw $361,394,535 interest earned on the Trust Account ~~transaction~~to ~~does~~pay ~~not~~tax ~~occur,~~obligations ~~management~~and ~~believes~~to pay the redemption. To the extent that aour ~~substantial~~capital ~~portion~~stock ofor ~~such~~debt ~~fees~~is ~~will~~used, ~~not~~in bewhole ~~required~~or in part, as consideration to becomplete ~~paid~~our orBusiness Combination, the remaining proceeds held in the Trust Account will be ~~substantially~~used as working capital to finance the ~~reduced~~operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

~~Additionally,~~As ~~related~~of ~~parties~~June ~~have~~30, ~~paid~~2023, ~~certain offering~~we ~~and~~had ~~operating~~cash ~~costs~~of as$324,161 ~~needed.~~outside of Asthe Trust Account of ~~March~~which 31$1, ~~2023~~778,779 ~~the~~represents amount withdrawn from Trust for tax purposes. The Company ~~owed~~believes ~~$9,605~~it is likely that it will be required to obtain additional funding in order to continue its operations for the ~~related~~next ~~parties~~12 onmonths. ~~account~~If ofa ~~unreimbursed~~business combination ~~expenses~~transaction ~~incurred~~does innot ~~connection~~occur, ~~with~~management ~~the~~believes ~~sourcing~~that a substantial portion of ~~its~~such ~~initial~~fees ~~Business~~will ~~Combination~~not ~~and~~be ~~the~~required ~~transactions~~to ~~contemplated~~be bypaid ~~the~~or ~~Merger~~will be substantially ~~Agreement~~reduced.

Additionally, related parties have paid certain offering and operating costs as needed. As of June 30, 2023, the Company owed $336,934 to the related parties on account of unreimbursed expenses incurred in connection with the sourcing of its initial Business Combination and the transactions contemplated by the Merger Agreement.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate, and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. The loans would be repaid upon consummation of a Business Combination, without interest.

Further, our sponsor, officers and directors or or their respective affiliates may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete a business combination, we would repay the Working Capital Loans. In the event that a business combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, converted upon consummation of a business combination into additional Private Warrants at a price of $1.50 per Private Warrant. As of ~~March~~June 3130, ~~2023~~ 2023 and December 31, 2022, no Working Capital Loans have been issued.

Going Concern

As a result of the expenses incurred in connection with the proposed transaction with Syniverse Corporation prior to its termination and other operating expenses, we anticipate that we may need to raise additional funds in order to meet the expenditures required for operating our business, pay our existing liabilities and pay for the costs of identifying a target business, undertaking in depth due diligence and negotiation a Business Combination. Additionally, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements—Going Concern,” management has determined that if the Company is unable to raise additional funds to alleviate liquidity needs, obtain approval for an extension of the deadline or complete a Business Combination by December 8, 2023, then the Company will cease all operations except for the purpose of liquidating. The Company intends to complete a Business Combination before the mandatory liquidation date or obtain approval for an extension, however, it is uncertain whether the Company will be able to do so. If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and the mandatory liquidation, should a Business Combination not occur and an extension is not requested by the Sponsor, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 8, 2023.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of ~~March~~June 3130, 2023. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

The underwriters are entitled to a deferred fee of $0.35 per Unit issued at our initial public offering, or $14,000,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that we do not complete a Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies

The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Class A Common Stock Subject to Possible Redemption

We account for our shares of Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of our balance sheets.

Net Income per Common Share

Our Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted, for Common stock subject to possible redemption is calculated by dividing ~~the~~ the proportionate share of income ~~or loss~~ on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject to possible redemption outstanding since original issuance.

Net income per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income, adjusted for income ~~or loss~~ on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.

Non-redeemable common stock includes Founder ~~Shares~~ Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income ~~or loss~~ on marketable securities based on non-redeemable shares’ proportionate interest.

Warrant Liabilities

The Company’s Warrants meet the definition of a derivative and are recorded as derivative liabilities on the Balance Sheet and measured at fair value. At each reporting date, changes in the fair value are recognized in the statement of operations in the period of change.

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We have adopted ASU 2020-06 effective January 1, 2022. The adoption of ASU 2020- 06 does not have an impact on our unaudited condensed financial statements.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of ~~March~~June 3130, 2023, we were not subject to ~~any~~ any significant market or interest rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March~~June 3130, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective, due to the material weakness in our internal control over financial reporting related to the Company’s ~~accounting~~ accounting for complex financial instruments and the accounting for accrued expenses. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Controls Over Financial Reporting

This quarterly report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

There is no material litigation, arbitration or governmental proceeding currently pending against the Company or any members of its management team in their capacities as such. The Company had been party to a legal proceeding captioned Adam Snitkoff v. Mohsin Meghji, et al. which was filed in the Supreme Court of the State of New York located in Nassau County in October 2021 in connection with certain claims relating to the proposed business combination with Syniverse. That proceeding was terminated pursuant to Notice of Voluntary Discontinuance with Prejudice on February 4, 2022. The Company and the members of its management team have not been subject to any other such proceeding in the 12 months preceding the date hereof.

Item 1A. Risk Factors.

Factors that could cause the Company’s actual business, financial condition and/or results of operations to differ materially from those in this Quarterly Report are any of the risks factors described in the Registration Statement and in the Company’s Annual Report on Form 10-K for the period ended December 31, 2022. As of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in our Registration Statement or such Annual Report filed with the SEC. Any of these risk factors could result in a significant or material adverse effect on the Company’s business, financial condition and/or results of operations. Additional risk factors not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business, financial condition and/or results of operations.

In addition, we may be subject to the following risk in connection with changes in laws and regulations. Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination and results of operations.

On March 30, 2022, the SEC issued proposed rules relating to, among other items, disclosures in business combination transactions involving special purpose acquisition companies (“SPACs”) and private operating companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed or in a revised form, may increase the costs of and the time needed to negotiate and complete an initial business combination, and may constrain the circumstances under which we could complete an initial business combination.

Inflation Reduction Act of 2022

Any redemption or other repurchase that occurs after December 31, 2023, in connection with a Business Combination, extension vote, liquidation, or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. It could also result in the diminution of the amounts available to the holders of Class A common shares upon any redemption.

On March 8, 2023, the Company’s shareholders/ stockholders redeemed 35,463,019 (Class A) shares for a total of $360,075,559. The Company evaluated the classification and accounting of the share/ stock redemption under ASC 450, “Contingencies”. ASC 450 states that when a loss contingency exists the likelihood that the future event(s) will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated the current status and probability of completing a Business Combination as of ~~March~~June 3130, 2023 and concluded that it is probable that a contingent liability should be recorded. As of ~~March~~June 3130, 2023, the Company recorded an excise tax payable of $3,600,756 calculated as 1% of the value of shares redeemed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On March 8, 2021, we consummated our Initial Public Offering of 40,000,000 Units. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $400,000,000. Each Unit consisted of one share of Class A common stock of the Company, par value $.0001 per share, and one-third of one redeemable warrant of the Company. Continental Stock Transfer & Trust Company acted as the sole book-running manager of the offering. The securities sold in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-253132). The SEC declared the registration statement effective on March 3, 2021.

Simultaneously with the consummation of the Initial Public Offering, we consummated a private placement of 7,500,000 Private Placement Warrants to our Sponsor at a price of $1.50 per Private Placement Warrant, generating total proceeds of $11,250,000. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Placement Warrants ~~are~~were the same as the warrants underlying the Units sold in the Initial Public Offering, except that Private Placement Warrants ~~are~~were not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants ~~are~~were exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. The private placement warrants were permanently surrendered by the Sponsor, and the Sponsor relinquished all rights in such warrants, with no consideration being provided to the Sponsor in exchange therefor on December 31, 2022.

Of the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $400,000,000 was placed in the Trust Account.

We paid a total of $8,000,000 underwriting discounts and commissions and $690,704 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $14,000,000 in underwriting discounts and commissions.

For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

No.		Description of Exhibit

31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules I 3a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules l 3a-l4(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	M3-BRIGADE ACQUISITION II CORP.
Date: May 22, 2023	By:	/s/ Mohsin Y. Meghji
Date: August 18, 2023	By:	/s/ Mohsin Y. Meghji
		Name:	Mohsin Y. Meghji
		Title:	Executive Chairman
Date: May 22, 2023	By:	/s/ Brian Griffith
Date: August 18, 2023	By:	/s/ Brian Griffith
		Name:	Brian Griffith
		Title:	Chief Financial Officer

Filing Compare · M3-Brigade Acquisition II Corp.